Metallus(US:MTUS)2026-02-20 19:14Financial Performance - Net sales for the year ended December 31, 2025, were $1,158.3 million, an increase of $74.3 million, or 6.9%, compared to 2024, driven by higher shipments and surcharges [162]. - Net sales for 2025 totaled $1,158.3 million, with base sales of $914.4 million after excluding surcharges of $243.9 million, compared to net sales of $1,084.0 million in 2024 [189]. - Net sales for 2025 reached $1,158.3 million, a 6.8% increase from $1,084.0 million in 2024, but a decrease from $1,362.4 million in 2023 [314]. - The United States accounted for $1,039.5 million of net sales in 2025, representing a 9.3% increase from $951.0 million in 2024, while foreign sales decreased to $118.8 million from $133.0 million [314]. - Revenue from the automotive sector was $472.3 million in 2025, up from $452.3 million in 2024, while industrial revenue increased to $408.1 million from $390.5 million [315]. - Net loss for 2025 was $(1.2) million, compared to a net income of $69.4 million in 2023 [265]. - Comprehensive loss for 2025 was $3.5 million, compared to a loss of $3.4 million in 2024 and a profit of $67.1 million in 2023 [268]. Profitability and Expenses - Gross profit for 2025 decreased by $2.6 million, or 2.7%, primarily due to unfavorable price/mix, despite higher volume and favorable raw material spread [165]. - SG&A expenses increased by $6.3 million, or 7.2%, in 2025, mainly due to higher variable compensation and annual merit increases [169]. - The company incurred restructuring charges of $2.7 million in 2025, which were not present in 2024 or 2023 [265]. - The company reported a stock-based compensation expense of $14.7 million in 2025, up from $14.0 million in 2024 [274]. Cash Flow and Liquidity - Total liquidity as of December 31, 2025, was $389.2 million, including cash and cash equivalents of $156.7 million [160]. - The company reported a decrease in cash and cash equivalents from $240.7 million in 2024 to $156.7 million in 2025, contributing to total liquidity of $389.2 million, down from $458.6 million [193][194]. - Operating activities generated $16.0 million in net cash for 2025, a significant decline from $40.3 million in 2024 and $125.3 million in 2023 [204]. - Net cash provided by operating activities decreased to $16.0 million in 2025 from $40.3 million in 2024, primarily due to higher working capital and increased pension contributions [205]. - Net cash used by investing activities rose significantly to $75.2 million in 2025 from $10.8 million in 2024, driven by higher capital expenditures and accelerated government-supported project spending [206]. - Net cash used by financing activities decreased to $25.2 million in 2025 from $68.9 million in 2024, attributed to lower shares surrendered for taxes and reduced repurchases of common shares [207]. Capital Expenditures and Investments - The company invested $109.0 million in capital expenditures in 2025, focusing on safety, equipment automation, and efficiency improvements [160]. - The company expects capital expenditures of approximately $70 million in 2026, including $35 million partially funded by the U.S. government [196]. - The company repurchased approximately 0.9 million common shares at a cost of $13.1 million, reducing diluted shares outstanding by 1.7 million shares [160]. - The company repurchased approximately 0.9 million common shares in 2025 at an average price of $14.53 per share, with a remaining balance of $89.7 million under its share repurchase program [202]. Pension and Retirement Obligations - A net loss of $6.6 million from pension and postretirement benefit plans was recognized in 2025, driven by a $27.8 million increase in pension liability [176]. - The company contributed $62.0 million to pension plans in 2025, with an expected total contribution of approximately $27 million for 2026 [197]. - Projected benefit obligations for pension and other postretirement plans were $534.8 million and $75.6 million, respectively, with an underfunded status of $91.7 million and $29.7 million [225]. - Net periodic pension expense for 2025 was $15.5 million, while postretirement benefit income was $5.4 million, based on a weighted average discount rate of 5.71% [226]. Taxation - The provision for income taxes for the year ended December 31, 2025, was $3.1 million, a decrease of $0.2 million from $3.3 million in 2024, reflecting a significant effective tax rate increase from 72.2% in 2024 to 163.2% in 2025 [183][186]. - The effective tax rate for 2025 was 163.2%, significantly higher than 72.2% in 2024 and 28.0% in 2023 [330]. - Cash taxes paid by Metallus for 2025 were $(7.1) million, a decrease from $27.9 million in 2024 and $25.3 million in 2023 [331]. - The total income tax payments (refunds) for 2025 were $(7.1) million, indicating a refund situation compared to positive payments in previous years [331]. Assets and Liabilities - Total assets increased to $1,140.2 million in 2025 from $1,116.7 million in 2024, reflecting a growth of approximately 2.1% [270]. - Total current liabilities rose to $314.9 million in 2025, up from $281.5 million in 2024, indicating an increase of approximately 11.8% [270]. - The defined benefit pension and other postretirement benefit obligation was $610.4 million as of December 31, 2025, exceeding the fair value of plan assets by $121.4 million [248]. - The company has no aggregate debt outstanding as of December 31, 2025, reducing interest rate risk exposure [234]. Market and Operational Risks - The company is closely monitoring trade developments, including tariffs that positively impact demand for domestic products, though the ultimate impact remains uncertain [160]. - Forward-looking statements indicate potential risks including fluctuations in customer demand, changes in operating costs, and competitive factors affecting market conditions [230]. - The company is exposed to risks from global conflicts and commodity price fluctuations, which could impact future operations [236]. - The company is managing commodity price risks through supplier pricing agreements and raw material surcharges [237]. Miscellaneous - The company operates as a single reportable segment, with performance evaluated on a consolidated basis by the Chief Operating Decision Maker [312]. - Metallus has an annual melt capacity of approximately 1.2 million tons and a shipment capacity of approximately 0.9 million tons [277]. - The company recognizes revenue upon shipment or delivery of products, with invoiced amounts generally due within 30 days [218]. - The allowance for doubtful accounts is adjusted based on forward-looking estimates of uncollectible balances, with historical write-offs being immaterial [288].